2019 Compelling Alternatives for Cash Investors - April 2019
2019 April - COMPELLING ALTERNATIVES FOR CASH INVESTORS
How we improve the outcomes for cash investors - April 2019
To have a chance of achieving a better return than that of a short-term deposit at a bank, investors need exposure to assets with a higher expected return than cash. The Coronation Strategic Income and Global Strategic USD Income funds are managed to achieve this by:
1. Taking considered interest rate and credit risk where appropriate (see definitions here); and
2. Increasing exposure to alternative sources of return (see definitions here) when the likelihood of outperformance is expected to be high.
Achieving a higher return than cash, however, comes with higher levels of risk. We manage risk by following a robust and consistent investment process. We apply defensive asset allocation guidelines and conduct careful research to identify individual securities trading below our estimate of fair value.
There are, however, no guarantees that our two managed income funds will always outperform cash or protect capital over short periods of time. Our risk objectives in both funds are to protect capital in rand or US dollar over all periods of six months and longer, and to achieve significantly less volatility than that of their respective benchmark bond indices.